IBM 2001 Annual Report Download - page 99

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company stock. The total cost of all of the company’s U.S.
defined contribution plans was $313 million, $294 million
and $275 million for the years ended December 31, 2001,
2000 and 1999, respectively.
Non-U.S. Plans
Most subsidiaries and branches outside the U.S. have defined
benefit and/or defined contribution retirement plans that
cover substantially all regular employees, under which the
company deposits funds under various fiduciary-type
arrangements, purchases annuities under group contracts or
provides reserves. Benefits under the defined benefit plans
are typically based on years of service and the employee’s
compensation, generally during a fixed number of years
immediately before retirement. The ranges of assumptions
that are used for the non-U.S. defined benefit plans reflect
the different economic environments within various countries.
The total non-U.S. retirement plan (income)/cost of these
plans for the years ended December 31, 2001, 2000 and 1999,
was $(209) million, $(198) million and $7 million, respectively.
U.S. Supplemental Executive Retention Plan
The company also has a non qualified U.S. Supplemental
Executive Retention Plan (SERP). The SERP, which is
unfunded, provides defined pension benefits outside the IBM
Retirement Plan to eligible executives, based on average
earnings, years of service and age at retirement. Effective
July 1, 1999, the company adopted the Supplemental
Executive Retention Plan (which replaced the previous
Supplemental Executive Retirement Plan). Some partici-
pants of the pre-existing SERP will still be eligible for
benefits under that plan, but will not be eligible for the
new plan. The total cost of this plan for the years ended
December 31, 2001, 2000 and 1999, was $23 million, $24 mil-
lion and $30 million, respectively. These amounts are
reflected in Cost of other defined benefit plans below. At
December 31, 2001 and 2000, the projected benefit obliga-
tion was $166 million and $163 million, respectively, and the
amounts included in Other liabilities in the Consolidated
Statement of Financial Position were pension liabilities of
$151 million and $131 million, respectively.
Notes to Consolidated Financial Statements
INTERNATIONAL BUSINESS MACHINES CORPORATION
and Subsidiary Companies
97
(Income)/Cost of Pension Plans:
U.S. Plans Non-U.S. Plans
(dollars in millions) 2001 2000 1999 2001 2000 1999
Service cost $«««««613 $««««563 $««««566 $««««429 $««««445 $««««475
Interest cost 2,624 2,553 2,404 1,214 1,234 1,282
Expected return on plan assets (4,202) (3,902) (3,463) (2,062) (2,042) (1,937)
Amortization of transition assets (140) (141) (140) (10) (10) (11)
Amortization of prior service cost 80 31 (21) 28 24 25
Recognized actuarial losses/(gains) ——16 (12) 428
Settlement gains ——— (12) (25) (23)
Net periodic pension income
—
U.S. Plan
and material non-U.S. Plans $«(1,025) $«÷(896) $«÷(638) $«÷(425) $«÷(370) $«÷(161)
Cost of other defined benefit plans 80 72 68 54 23 37
To tal net periodic pension income for
all defined benefit plans $««««(945) $÷«(824) $«÷(570) $÷«(371) $«««(347) $«÷(124)
Cost of defined contribution plans $÷«««313 $««««294 $««««275 $÷««162 $÷««149 $««««131
Total retirement plan (income)/cost recognized
in the Consolidated Statement of Earnings $««««(632) $«««(530) $«««(295) $«««(209) $«««(198) $««««««««7
See beginning of note u, “Retirement-Related Benefits,” on page 96 for the company’s total retirement-related benefits
(income)/cost.